Management Essay

Topics: Ethics, Business ethics, Social responsibility Pages: 7 (2133 words) Published: May 6, 2013
Name: Ng Li Shien
Student ID: 17234207
Class time: 5.00p.m
Class date: Tuesday 23/4/2013
Unit Code: Management 100-10848
Exact word: 1574words
E-mail Address:
Tutor’s name: DR Siti Rohani Md. Yusof

Topic 2
In making a decision, managers will sometimes meet an ethical dilemma. To determine an ethical decision, Waddell, Jones and George (2011, 148) suggests that the three models which are Utilitarian Model, Moral Rights Model and Justice Model should be analysed carefully then applied. At that moment, sport apparel chain in Australia which is having a contract with Nike has announced dealing with Fair Trade suppliers, who met minimum employment and safety standards in their factories. However, Nike was accused of intimidating workers to accept less than the minimum wage by hired military personnel in Indonesia (“Nike workers have been intimidated” 2013). Hence, an ethical dilemma occurs. As a manager of the sport apparel chain, decision of continuing or terminating contract with Nike should be considered carefully then processed. In brief, utilitarian model emphasizes a decision has to benefits many people whereas justice model suggests that a decision creates a fair way which the benefit and harm equals upon all stakeholders as well as moral rights model claims a decision has to protect human’s rights. Nike’s actions are unacceptable and unethical. Among these three models, the moral rights model should be considered the most since Nike obviously brought serious harm to the employees’ rights. From the perspective of utilitarian model, Waddell, Jones and George (2011, 148) define that, “An ethical decision is a decision that produces the greatest good for the greatest number of people”. A wise manager can decide and measure the pros and cons to each stakeholder then take a course of action correctly which can benefit the most to stakeholders. “Known as organisational stakeholders, these individuals and groups include shareholders, managers, non-managerial employees, customers, suppliers, the local community and the citizens of the countries in which an organisation operates” (Waddell, Jones and George 2011, 146). In this case, benefits of shareholders and employees should be considered cautiously. Normally, shareholders are willing to gain reputation and profit for the organisation. “Reputation, the esteem or high repute that individuals or organisations gain when they behave ethically, it is a valuable asset” (Waddell, Jones and George 2011, 152). Reputation has to be protected to earn profit because business is in a long run that once behaving unethically can cause a long suffering in reputation. For instance, Enron Corporation ends up bankrupt due to the failure of functioning in a morally and ethically responsible manner by the board of directors (Zandstra 2002, 16). As the chain just deals with Fair Trade suppliers, it is obvious to be said that the chain values reputation than profit. If the decision is continue dealing with Nike, it will harm the chain’s reputation as it seemed to be silent agree with those unethical actions. Besides, it also means that the chain values employees and protect their rights. Even though Nike has such a bad background but its product still remains in good quality, if terminate contract with Nike, sales might drop and customers might reduce. In summary, reputation and employees’ rights are far more important than profit, so if the decision is to terminate contract with Nike, it benefits organisation and Nike’s employees. However, if the reputation drops, the chain will long suffer same with Enron Corporation. In conclusion, terminating contract is a considerable and beneficial decision due to it provides the most benefits to stakeholders. “ An ethical decision is a decision that best maintains and protects the fundamental rights and privileges of the people affected by it such as ethical decisions protect people’s right to freedom, life and...
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